Tuesday, March 21, 2017

Inflation rise hits the poorest

“This is proof that the British public are paying the price for Theresa May’s decision to take Britain out of the Single Market, which is causing a Brexit squeeze. With the pound falling in value by 18% since the referendum, the price of imports have shot up and broken the official target.

“Worst of all, the dramatic leap in food prices is hitting the poorest the most, with some producers also reducing package sizes, meaning the real inflation figure is now much higher.

“The fragile UK economy has been kept on life support by consumer spending, but with prices rising, that is now threatened.”

Local Liberal Democrats point out that the BBC reports that prices at the factory gate are also rising quickly, suggesting more inflation is on the way to the High Street. At 2.3%, inflation is increasing at the same rate as average earnings, meaning the average pay rise is being totally eaten up by increasing prices. Public sector workers whose pay is capped are already feeling the effects of rising inflation; now the average worker is going to be worse off as inflation overtakes average wage rises.

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